The Maryland Motor Vehicle Exemption in Bankruptcy
Maryland does not have a motor vehicle exemption but you can use Maryland's wildcard exemption to protect car equity in bankruptcy.
Although Maryland does not have a specific motor vehicle exemption, you can use Maryland's wildcard exemption to protect equity in your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy.
Although Maryland does not have a specific motor vehicle exemption, you can use Maryland's wildcard exemption to protect equity in your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. Here you’ll find information about Maryland's exemptions: how much it is, what types of vehicles it covers, how it works for married couples, how to find the applicable statute, and more.
(For more information about exemptions, including how they work and which ones you can use, see our Bankruptcy Exemptions area. For information specific to the motor vehicle exemption, see our Motor Vehicle Exemption in Bankruptcy area.)
Maryland's Exemptions and Your Car
Maryland’s exemptions play a large role in determining whether or not the bankruptcy trustee can take your vehicle to repay your unsecured creditors. If the equity in your car is protected by Maryland’s exemptions, then the trustee cannot sell it. If the equity in your car is significantly more than the applicable exemption amounts, the trustee is likely to sell your car to repay your unsecured creditors. For details, see The Motor Vehicle Exemption: Can You Keep Your Car in Chapter 7 Bankruptcy?
Keep in mind that even if your car is safe from the bankruptcy trustee, the lender may be able to repossess your car during or after bankruptcy. To learn more, see Your Car in Chapter 7 Bankruptcy and If You Are Behind on Your Car Payments, Can Chapter 7 Help?
Using Maryland's Exemptions to Protect Your Car
The state of Maryland does not have a specific motor vehicle exemption. However, you can use Maryland's wildcard exemption to protect your car.
Maryland's wildcard exemption allows you to protect up to $6,000 in equity in cash and other property, plus an additional $5,000 in any personal property. If you use the wildcard exemption to protect property not covered by other exemptions, you can use whatever is left of that exemption to protect your car. (To learn more, see The Maryland Wildcard Exemption.)
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the federal bankruptcy exemptions instead of state exemptions, but Maryland is not one of these states.
Can Married Couples Double Maryland’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. In Maryland, if you and your spouse file joint bankruptcy, you are each entitled to $6,000 in wildcard exemption to protect your property, giving you $12,000 of wildcard exemption for cash and other property and another $10,000 of wildcard exemption for any personal property (however, your spouse cannot use his or her wildcard exemption to protect property that is your individual property and vice versa).
(To learn about the advantages and disadvantages of joint bankruptcy filings, see Nolo's section on Bankruptcy Options for Married Couples).
What Vehicles and Insurance Are Covered by the Maryland's Exemptions?
You can use Maryland's wildcard exemptions to cover any vehicles and any cash associated therewith.
Checking Maryland’s Exemption Laws
You can find Maryland’s motor vehicle exemption at Md. Code. Ann. 11-504.
When the Maryland Exemption Amounts Are Updated
The exemption laws in Maryland change periodically. Check the statute to confirm updated amounts.